## Question

# A machine costs Rs 90,000 and is deemed to have a scrap value at 5% at the end of its effective life. A machine costs

A machine costs Rs 90,000 and is deemed to have a scrap value at 5% at the end of its effective life…. A machine costs Rs 90,000 and is deemed to have a scrap value at 5% at the end of its effective life of 19 years. Usually, the machine is expected to run for 2,400 hours per annum, but it is estimated that 150 hours will be lost for normal repairs and maintenance and further 750 hours will be lost due to staggering. The other details in respect of the machine shop are as follows:

(a) Wages, bonus and provident fund contribution of each of the two operators (each operator is in charge of two machines)

Rs 6,000

(b) Rent and rates of the shop

Rs 3,000 per annum

(c) General lighting of the shop

Rs 250 per month

(d) Insurance premium for the machine

200 per month

(e) Cost of repairs and maintenance per machine

250 per month

(f) Shop supervisor's salary

500 per month

(g) Power consumption of the machine would be 20 units per hour, rate of power per 100 units

Rs 10

(h) Other factory overhead attributable to shop

Rs 4,000 per annum

There are four identical machines in the shop. The supervisor is expected to spend one-fifth of his time for supervising machines. Compute a comprehensive MHR from the above details:

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